UK Passport Contract

Debate between Michael Meacher and Damian Green

Thursday 2nd December 2010 Commons Chamber

[The Minister for Immigration (Damian Green)]

I congratulate the right hon. Member for Oldham West and Royton (Mr Meacher) on securing this debate. Given that he made the point himself, I am sure that he will understand that it would be inappropriate for me to discuss detailed areas of commercial information at the Dispatch Box.

I appreciate that the right hon. Gentleman is rightly concerned about the impact on jobs in his constituency. That is understandable and right—any Member of the House would feel the same. The loss of jobs anywhere is to be much regretted. As he said, the passport has been produced in his constituency for the past 40 years. I congratulate 3M and the predecessor companies on the work they did on the passport, and I am happy to reassure 3M that nothing the right hon. Gentleman has said will alter my or the Home Office’s attitude to it in any future Government business for which it tenders. We treat all potential procurement exercises fairly and equally, and we look at the competence of those involved and the price they are charging. The right hon. Gentleman is correct also that the Identity and Passport Service provides an extremely good service.

At that point, however, I parted company from much of what the right hon. Gentleman said. He will be aware that the contract for the printing of the British passport was granted under the previous Labour Administration, and I have no reason to believe that the tender process was anything other than fair and subject to open competition. He prayed in aid of 3M Sarah Rapson, but he will be aware that she became the head of the IPS only in recent months, so all the decisions he is talking about, and everything he is complaining about, happened before she became head of the IPS and said what he quoted her as saying, apparently in aid of his argument. At that time, 3M Security Printing and Systems submitted an unsuccessful bid, and the contract was awarded to De La Rue. It was signed on 2 July 2009, and the service commenced in October 2010.

The right hon. Gentleman made an explicit attack on what he described as the integrity of the process. I want to make clear—as, I am sure, would he—that that did not entail an attack on the integrity of those involved. He took the opportunity to name a number of officials, but I am sure that he was in no way attempting to attack their integrity. That would be wrong, and it would clearly also be wrong to attack the integrity of the Minister involved. The right hon. Gentleman said that the process was wrong. He knows, as a former Minister himself, that Ministers are responsible for the process, so attacking the process would be attacking the Minister as well.

The right hon. Gentleman also said one thing that was simply factually incorrect. He said that all the senior officials involved were still there advising me, as a Minister in the new Government. That is not true. James Hall, who was head of the Identity and Passport Service at the time, has retired, which means that the most important official who was involved when the decision was made is no longer there. I think it important to put that on the record.

[Mr Meacher]

The point that I was making is that the senior officials who attended on the Minister when we made representations to him were closely involved in the original allocation of the contract. I did not say that all the officials who were originally involved were there now, but those who played a significant part are still there, and I therefore do not think the process is genuinely independent.

The Minister questioned whether I had been right to say that the process had not been fairly undertaken. I will not repeat them now, but I presented three, four or five arguments in my speech which need a precise answer rather than just “I am satisfied with the process”.

[Damian Green]

It is not very surprising that some of the officials who were at the IPS a year or so ago are still there. I can reassure the right hon. Gentleman that no single individual or, indeed, small number of individuals could have decided the outcome of the bid. More than 25 evaluators were involved in the process. I am sorry that, when he intervened on me, the right hon. Gentleman did not take the opportunity to make clear that he was not attacking the integrity of the individuals involved. I had given him every chance to do so.

As the right hon. Gentleman knows, I met him and representatives of 3M on 15 September 2010 to discuss their request for the contract to be retendered on the basis of the decision of the coalition Government to halt the second biometric in the United Kingdom passport. As I said then and will repeat tonight, I do not consider that either the right hon. Gentleman or 3M has presented any new information that would merit the adoption of such an approach. Nor, in particular, would it be appropriate to put at risk the continuity of the passport operation.

The right hon. Gentleman and 3M argue that savings of £100 million are to be had simply because the form of the passport has been changed through the removal of the second biometric. As I have said, I do not find that argument convincing. Moreover, as the right hon. Gentleman knows, the approach to me was made only a few weeks before the new passport operation was due to begin. The main principle that guides me must be the preservation of the safety, security, smooth running and smooth production of the passport service, and the consideration that the right hon. Gentleman is inviting discontinuity must bear heavily on me as the Minister responsible for the passport service.

As the right hon. Gentleman has admitted, the IPS achieves a high level of public satisfaction in the quality and security of the service it delivers. That relies on its ensuring that all parts of its operation work effectively and efficiently, in the best interests of the customer and the wider interests of the UK economy.

The right hon. Gentleman cast doubt on the process. Of course, the IPS followed the EU procurement regulations process, which was initiated on 19 June 2008 by the issue of an Official Journal of the European Union notice. The award of the new passport design and production contract was necessary due to the current passport contract expiring on 4 October 2010. The Identity and Passport Service announced on 11 June 2009 that De La Rue had won the £400 million contract to produce the new British passport book over the next 10 years. That contract commenced on 5 October 2010.

The De La Rue contract represents better value for money and introduces a new design and improved quality for the customer. In addition, the tender process allowed savings on print costs to be made in relation to the current contract. The IPS ensured that all bidders were offered an equal opportunity to compete against the incumbent supplier, 3M SPSL. The objective of the procurement was to complete a fair, transparent, robust, defensible and fully auditable evaluation exercise that ultimately identified the most suitable supplier to deliver passport services. The supplier produces a secure, high-quality passport, and provides production arrangements at a competitive price.

There are about 48 million passport holders in the UK, which represents 80% of the eligible population. The new supplier is expected to produce up to 6 million passports every year. The current length of the contract ensures that there is the right balance between the level of investment required, the need for good relationships to be fostered, and the need for the IPS to remain flexible and responsive to the way in which the market changes over time.

The procurement process over which the right hon. Gentleman has cast doubt was subject to detailed and thorough assurance from Home Office Commercial, the Office of Government Commerce and an external audit, including a National Audit Office review to ensure that an objective assessment was reached. The awarding of the contract was based on which supplier offered the best overall solution and value for money, measured against a clear set of evaluation criteria, of which 3M was fully aware and against which it performed during detailed competitive processes.

[Mr Meacher]

The Minister is talking entirely about the award of the contract. I accept that I made comment about that, but the thrust of my argument was not going back over the past, but looking to the future, and the fact that 3M is offering a £100 million reduction in the cost, which is more than highly competitive and would avoid the loss of 100 jobs. Will the Minister please concentrate his remarks on why that is not acceptable, even if it requires a retender?

The Minister wants me to make a comment about integrity. I referred to the integrity of the process. I did not refer to individuals, but I do think there are serious issues about the conflict of interest of the various individuals to whom I referred.

[Damian Green]

I am grateful for the right hon. Gentleman’s clarification of what he is getting at when he speaks of integrity. I can only observe gently to him that the background of those who were senior in the IPS over a year ago was well known to him and to everyone else at the time. If he is so disturbed about it now, it might have been more useful to his cause to have pointed that out at the time to a Government of whom he was a supporter.

In a sense, that is irrelevant, because any Minister of any Government would try to make the best decision, but if the right hon. Gentleman is disturbed about the process and about the senior officials involved in it, the time to make that point is before a decision is taken, not a year afterwards. As I say, I have absolutely no evidence to suggest to me that anyone involved—the Minister or any of the officials—in a process which clearly I had nothing to do with, deserve any shadow cast over them. The right hon. Gentleman is making such an implication now. All I can sensibly do is observe that it might have been more helpful to his cause if he had made that observation at the time.

The right hon. Gentleman makes the point that 3M says that it could fulfil the contract now for £100 million less. As I have said repeatedly in private meetings and again this evening, I have seen no convincing evidence that backs that up. Again, 3M was given the opportunity to bid for the work at the time. The reasons that it was unsuccessful were fully explained to 3M. There is no economic reason why the IPS should seek to put its operation at risk by reopening a contract that is up and running and working effectively.

I have to end on that point, because that is the most important point for me. I must be responsible for an effective and efficient passport service. Asking me to put at risk—